Analysis for the European Brewing Industry

Analysis for the European Brewing Industry Political Environment Political environment affects the European companies but as government is stable in Europe, the brewing industries can easily work if they follow a certain approach while keeping the government system in mind. In Europe taxes, duty rates and VAT are higher on products as compared to UK and France, so the companies should consider small and under developed nations where taxes are low. In Europe there was a governmental pressure of eliminating the agricultural subsidies that can lead to a change in the agricultural base. Brewing firms should understand this change and be ready with differential pricing schemes which can complement this change in agriculture. Economic Environment In Europe, most economies have a sustained growth rate of above 8 %. This shows that there is huge scope for industries to grow. European markets were also affected by 9/11 attack which in turn affected the tourism industry and at the same time, global recession also affect the whole Euro pean market. People invest a big part of money for their entertainment and fun. Very least part of their income goes for alcohol consumption as they are becoming more educated about health (The European Brewing Industry, 1999). Socio-cultural Europe had nine out of ten highest median populations in 2005. So health issues were a big concern unlike the youth population of India and China etc. (Demographics of Europe). The younger generation of population had a changed lifestyle and this turn have impacted European markets because of the smoking and poor nutrition habits (Ageing Population and Lifestyle Changes Drive Demand for Orthopaedic Biomaterials in Europe). These kinds of awareness issues will impact the sale of breweries in European market to the younger generation. Most of the retail companies are keeping beer in their stores because of the family shopping is done through retails. Technology The customer interest has changed as they are more attracted with flavoured Beer and w illing to taste new brands. With the help of technology new and more efficient ways are open for the production of beer, assisting in achieving economies of scale (European Brewing Industry, 1999). Legal Alcohol related advertisements have been restricted by European Union Consumption of drinking alcohol has also been affected by strict law of drinking and driving and domestic violence as awareness and different rules have been set up to stop this. W H O has planned to increase tax as well as advertising ban for alcohol products and proposed breathe testing of drivers. It has given this model to EU for implement as physician advice this model is estimated to cost 1.3 billion Euros for implementation. (Institute of Alcohol Studies, 2009). WHO estimated that using by this model disability and premature death could be avoided by 1.4million (Institute of Alcohol Studies, 2009). Environmental EU’s main priority is toward health problems and also concentrating on Climate change and preserving biodiversity (Europa, 2010) 20% of emissions and 20 % of total energy consumption has planned to be reduced by EU by the year 2020 (Europa, 2010). Eco- friendly products which are energy efficient are being put up for promotion by the commission (Europa, 2010).